Developing Communities Around Mining Businesses
TechnoServe is helping a range of small businesses in a Peruvian mining community to capitalize on the mine's presence and use it as a springboard for broader economic growth.
To create more economic opportunities in rural communities surrounding its mines, Minera Yanacocha, South America's largest gold producer, is working with TechnoServe. The partnership is helping small enterprises capitalize on the mine's presence in Cajamarca, a region of Peru's northern highlands where most of the population lives in poverty.
Starting in 2003, The Association Los Andes de Cajamarca (ALAC), Minera Yanacocha's social development arm, and TechnoServe, with support from the International Finance Corporation, helped 22 Cajamarcan businesses grow their capacity to supply the mine's catering facilities with high-quality cheese, preserves and bottled water.
TechnoServe's business advisors helped entrepreneurs such as Carlos Vergara improve their management and production.
Within a year, Vergara's cheese business began supplying Yanacocha's catering company, and sales grew by 40 percent. This enabled it to buy more milk from area farmers and to pay premium prices, significantly raising farmers' income.
"Other consultants just stay at the level of theories and reports, but TechnoServe came to my business and worked directly with me to get results," Vergara says.
Initial successes such as this in serving local markets prompted TechnoServe to help these businesses expand to regional and international markets as well. As the businesses flourished, TechnoServe withdrew. The businesses have continued excelling on their own, with additional sales resulting from TechnoServe's assistance exceeding $2.1 million in 2006 alone.
"TechnoServe has demonstrated that Cajamarcan businesses can be competitive," says Violeta Vigo, executive director of ALAC. In 2006, TechnoServe and Yanacocha agreed on a second two-year phase, which will promote youth entrepreneurship, identify and support budding entrepreneurs, and advise 30 more businesses, bringing even more jobs to Cajamarca.
TechnoServe has also begun working with other mining companies to do similar work in another part of Peru as well as in Africa.